Why Smart Manufacturing Is a Dumb Idea

Someone recently asked me my thoughts on smart manufacturing – the so-called IT revolution in the factory. They couldn't believe I didn't see smart manufacturing as the salvation of American manufacturing.

Don't misunderstand me. Smart manufacturing has a place in reviving American manufacturing. I have a smart factory. We employ the latest in pick to light systems, automated CNC machines and seamless integration from order inquiry to accounts receivable, but that isn't where I started my revolution and you shouldn't either.

The problem with many CEOs today is they have turned away from the astonishing potential of the workforce and turned toward automation instead. This is a big mistake, but I hear it all the time.

What is the sense in spending millions on automating your factory if your workforce could care less? What is the sense in buying expensive machine tools if your workforce has to drag themselves to work and can't wait to get to the bowling alley? I'll tell you why. It is because too many CEOs view their employees as expandable assets when they should view them as renewable resources and renew them.

Don't bother with smart manufacturing if you have a dumb workforce. And if your workforce is dumb, it's your fault, not theirs. Don't bother with an IT revolution. Your revolution must start with a smart workforce. Make a new compact with your employees and ignite the human spirit in your workforce.

Imagine what would happen if every day your employees came to work excited to do better today than they did yesterday? Think about how your company would soar if your employees were absolutely dedicated to supporting the mission and each other in attaining it? Consider what it would be like if your employees were like Cirque de Soleil performers?

This is where I get blank stares from many CEOs. They don't like the "soft stuff." "Give me the hard stuff," they say. "Tell me how to build a smart factory, not a smart workforce," is what I often hear.

It has to be the other way around. Start by building a smart workforce — a workforce that is engaged, enlightened and empowered, and that trusts and believes in its leadership. This is a tall order to be sure, especially if the leadership is a bunch of boneheads who care more about depreciation than employee engagement.

Here are four key ways to start:

1. Build Leadership Credibility at the Top

The only way to have leadership credibility is if your leaders demonstrate key values of respect and integrity.

2. Leaders Need to Treat Employees with Respect

In a recent Harvard Business School study of 20,000 employees, half of them did not feel respected by their leaders. Respect was rated by the participants as more important than anything else, including compensation. Imagine how company performance would skyrocket if you solved this one problem alone.

3. Leaders Must Demonstrate Integrity

In study after study, integrity has been found to be a key attribute in leaders that people admire and want to follow. So integrity is a key part of building credibility, but leaders also need integrity in everything they say. You can't be like many leaders and tell half the truth, hoping the other half doesn't show up. You must be completely honest all the time. You have to tell them what they need to know. If the company is headed for trouble, tell them. If the company needs to pivot into new markets or products, tell them. And tell them why. Tell them everything. You would be amazed at how smart your workforce can be if you give them half a chance. I always say, "trust in truth."

4. The Entire Workforce Must Embrace the Values of Respect and Integrity

This is not just for the top, but you cannot expect people below to do what the top will not. You may have leaders who lost credibility long ago. They can't get it back. You have to replace them.

Smart manufacturing begins at the top, not the bottom. Smart manufacturing starts with creating a new compact with the workforce. Smart manufacturing begins with people, not machines.

About the Author

Steven L. Blue is the president and CEO of Miller Ingenuity, a global supplier of mission-critical solutions in the transportation industry and author of the new book, American Manufacturing 2.0: What Went Wrong and How to Make It Right. Connect with Steven on Twitter @SteveBlueCEO or visit www.SteveBlueCEO.com or www.milleringenuity.com.